Intertemporal choice question

Hi,

Under the conditions that we imposed on preferences (essentially a preference for more consumption that less, and for smoothing consumption over time), it implies a direction of the substitution and income effects --- the results of which we collected in a table in one of the lecture slides. Your diagrams should be consistent with that information.

The direction of the SE and IE depends on whether the consumer is a borrower or a saver.

Best
Oliver